You are on page 1of 50

1 | P a g e

MAHATMA EDUCATION SOCIETYS


PILLAI INSTITUTE OF ART, COMMERCE &SCIENCE
SECTOR-16, NEW PANVEL
RE-ACCREDITEDBY NAAC WITH`A`GRADE


PROJECT ON

IN THE SUBJECT :-COST ACCOUNTING

SUBMITTED BY
UNIVERSITY OF MUMBAI
FOR SEMESTER-1 OF
MASTER OF COMMERCE
By
PRATAP NARESH GHARAT
UNDER THE GUIDANCE OF
PROF.GAJANAN PANDIT WADER
2013 -2014

2 | P a g e






STUDENT`S DECLARATION


I, Pratap Naresh Gharat student of M Com SEMESTER-1 Roll
Number hereby declare that the project for the subject
cost accounting titled

Submitted by me for semester 1 during the academic year
2013-2014 is based on actual work carried out by me under the
guidance and supervision of prof.Gajanan Pandit Wader. I
further state that this work is original and submitted anywhere
else for any examination




Signature of student


3 | P a g e

























4 | P a g e


EVALUATION CERTIFICATE
This is to certify that the undersigned have assessed and
evaluated the project on
Submitted by Pratap Naresh Gharat student of M Com part 1.
This project is original to the best of our knowledge and has
been accepted assessment.








Internal Examiner External Examiner
Principal




5 | P a g e


PILLAI INSTITUTE OF ART, COMMERCE &SCIENCE
Internal Assesssment:Project-40 Marks
Name of the student Class Division Roll
Number
First name: Pratap
Father`s Name: Naresh
Surname: Gharat

M COM
SEM-1


Subject :-COST ACCOUNTING
Topic for the project:

Market Awarded

Signature
DOCUMENTATION
Internal Examiner
(out of 10 Marks)

External Examiner
(out of Marks)

Presentation
(out of 10Marks)

Viva and Interaction
(out of 10 Marks)



TOTAL MARKS(out of 40)



6 | P a g e




EXECUTIVE SUMMARY

The report contains introduction to Banks, which includes past, present
and future of banks and challenges for banking industry in future. Banks plays the
most important role in providing various banking services. Earlier banks were
engaged in accepting and lending money. But in the recent past the scope of services
provided by the banks has increased. The growing competition requires prompt and
efficient services to the customer sat reasonable cost. These days bank aim to provide
maximum satisfaction to their customers.
The next section of report i.e. training methodology consist title of report,
duration of training session, objective and limitation of study etc. this section
basically giving the outline of the report.
The next part is a brief introduction of BANK OF MAHARASHTRA
comes in the report which consist the history, and objective made by Chief Manager
MRS. RUPAM CHAUKEKAR. The current financial position of the bank also
includes in this part.
Next section consist the loan facility provided by bank. This section
consist various loans provided by bank the detail regarding those loans, procedure to
recover it, consumers detail about term loans, and recommendation and to
face future challenges and the suggestions for the improvement. Final section of
report consist conclusion and bibliography





7 | P a g e




INDEX


Chapter Nos.

Table of Contents

Page Nos.
Chapter 1


Introduction
Objective of the study
Scope of the Project
Research Methodology
Limitations of the Project

Chapter II


Bank Profile
Organization Chart
Benefits given by Bank


Chapter III


Theoretical Background.
Data Analysis & Interpretations

Chapter IV


Findings
Suggestions / Recommendations
Conclusion
Bibliography




8 | P a g e




INTRODUCTION

A bank is considered a safe and secure place where we could invest our
wealth as cash, keep our valuables in locker and also cash transactions. Often when
there is a tight for our cash flow we take loan from the bank. This may be for various
purposes like educational, occasional, agricultural, property, vehicle etc. If we are
starting a new business where we are investing a huge amount of money, the first
thing we do will be to choose a suitable banking partner. A bank can help the business
grow in many areas, for e.g. the bank gives a special privilege called Overdraft or OD.
This OD will help the company during financial crisis and allow them to run their
business smoothly. The process. This portal allows users to check the details of the
banks financial position and ranking, it also allows users to go through the status of
their various undertaken loans and bank balance online.
Of selecting a bank is pretty much simple; we can go through their balance
sheets per financial year. The banks performance will be directly shown in the yearly
report. The interest rate that banks provide would be mentioned on their financial year
report and the risks associated with it could be also could be read from it. The fiscal
rating will be also mentioned in yearly report.








9 | P a g e



OBJECTIVE OF THE STUDY

The study was mainly conducted to understand the concept of home loan,
education & vehicle scheme and the eligibility criteria of the customers.
The study is done to understand the documents involved in the home, education
loan scheme and the repayment methodology adopted by various banks.
The innovative home, education & vehicle loan schemes and the risk capturing
mechanism adopted by banks and the future of the house , education & vehicle loan
segment has been undertaken as a part of this study.


SCOPE OF STUDY:

The study covers a period of 2 months from may and june 2013. There are several
reasons for selecting this period.
The study is limited to only Bank of Maharashtra. This study is mainly related to
the individuals who are interested in taking home loans from banks to fulfill their
dreams.
The study is mainly related to the term loans provided by Bank Of Maharashtra.






10 | P a g e



RESEARCH METHODOLOGY

RESEARCH OBJECTIVES :-

To understand term loans procedure in the Bank of Maharashtra.
To make a comparative study among Bank of Maharashtra
Operating in public and private sector.
To understand the consumer behavior in respect to the service offered by
different banks.
To offer the suggestions for improvement for different sectors of the bank

DATA SOURCES :-

The research involved gathering Secondary data as well as Primary data.
For the purpose two types of survey was conducted by me to collect the data.

PRIMARY DATA :-

The approach adopted was a survey with the customers visiting .
and interview session with management of the company.




11 | P a g e



SECONDARY DATA :-

In our case secondary data were collected from:

News paper (Economic Times)
Information Brochures.
On the job training
Pamphlets
News paper (Economic Times)

QUESTIONNAIRE DESIGN / FORMATION :-

We started off with distribution of questionnaire at various places like Outside
the Government Banks:









12 | P a g e



LIMITATIONS OF THE PROJECT

The sample size of customers and prospects is fairly small and consistent
conclusions cannot be drawn on the information provided. Satisfaction being a
relative term cannot be much commented on as it varies from individual to individual
and can only be measured if the respondent has also experienced the services of a
similar organizations in a similar sphere. One major constraints was the small sample
size as it may lead to slight variations in the end result. A few customers were either
quite reluctant to part with their precious time or had problems
in attaching weights and emphasis to different attributes. Customers in refinance cases
were in direct contact with the dealers and were more bothered with getting the
delivery of the car rather than handling the delays on availing the finance as it did not
directly affect them. There is bound to be a subjective bias in the results because of
inconsistency and selective perception about the opinions of the respondents.
In the context of this rule, the following definitions apply:
(A) "Person" means an individual; a corporation; a government, governmental
subdivision or agency; a business trust; an estate; a trust; a partnership or association;
a limited liability company; two or more persons having a joint or common interest;
or any other legal or commercial entity.
(B) "Commitment to lend or extend credit" includes, but is not limited to:
(1) Undisbursed portions of operating, construction or other lines of credit, up to
limits established by a written agreement between the lender and the borrower;
(2) Undisbursed portions of credit lines established to cover overdrafts;
(3) Undisbursed portions of credit card plans;
(4) Standby letters of credit.
(C) "Common enterprise" occurs when two or more persons combine to acquire,
operate or control a business enterprise or property interest. Credit to a common
enterprise includes:
13 | P a g e



(1) Loans or extensions of credit to two or more persons when:
(a) Loans or extensions of credit are used for a common purpose; and
(b) The expected source of repayment for each loan or extension of credit is the same
for two or more of the persons, and those persons lack another source of income from
which the loans or extensions of credit, together with the person's other liabilities,
may be fully repaid.
(c) Loans or extensions of credit made:
(i) To persons who are related directly or indirectly through common control,
including where one person is directly or indirectly controlled by another person; and
(ii) Substantial financial interdependence exists between or among the persons.
Substantial financial interdependence is deemed to exist when 50% or more of one
person's gross receipts or gross expenditures, on an annual basis, are derived from
transactions with the other person.
(d) "Control" means the following:
(i) The ownership, control or ability to vote 25% or more of a corporation's
outstanding voting stock.
(ii) The ability to control, in any manner, the election of a majority of a
corporation's directors;
(iii) The power to exercise a controlling influence over the management or policies
of a corporation.
(e) The proceeds of a loan or extension of credit to a person will be deemed to be used
for the "direct benefit" of another person and the amount of the loan will be attributed
to the other person when the proceeds, or assets purchased with the proceeds, are
transferred to the other person. For the purpose of this definition, when the proceeds
are used to acquire property, goods or services through a bona fide arm's length
transaction, a direct benefit will not have occurred with regard to the seller of the
property, goods or services.

14 | P a g e




(i) "Bona fide arm's length transaction" means an actual transaction, performed in
good faith, between two or more parties, with each party acting in his or her own self-
interest.
(f) "Loan or extension of credit" includes, but is not limited to:
(i) Direct loans, whether on the bank's books or charged off the bank's books,
subject to the exclusions in (3) (a) below,
(ii) Loans, extensions of credit, or participation in loans or extensions of credit sold
with recourse to or guaranteed by the bank,
(iii) Letters of credit, other than standby letters of credit,
(iv) Overdrafts, excluding intra-day overdrafts for which the bank receives payment
prior to its close of business.
(2) For lending limit purposes, loans or extensions of credit will be combined as
follows:
(a) Loans or extensions of credit to a person will be combined with loans or
extensions of credit to one or more other persons when:
(i) Proceeds of a loan or extension of credit are to be used for the direct benefit of
the other person, or
(ii) A common enterprise is deemed to exist between the persons, to the extent that
loan proceeds are used for the benefit of the common enterprise and repayment is
dependent upon the common enterprise.
(b) A loan or extension of credit guaranteed by a person shall be aggregated with the
person's other loans and extensions of credit only to the extent that the person receives
direct benefit from the loan.


15 | P a g e



COMPANY PROFILE

Bank of Maharashtra is a government bank in Maharashtra, which
offers personal banking, cash management, retail loans and other financial services.
Their services include deposits, savings/current bank account, vehicle loans, personal
loans, retail trade finance, global banking, lending to priority sector and small scale
sector, foreign exchange and export finance, corporate loans and equipment loans.
The Bank has one subsidiary, namely The Maharashtra Executor & Trustee Company
Pvt Ltd, which undertakes management of public/ private trusts and administration/
execution of Will. They also sponsored three Regional Rural Banks, namely
Aurangabad Jalna Gramin Bank, Thane Gramin Bank and Marathwada Gramin
Bank with head office at Aurangabad, Thane and Nanded respectively. Bank of
Maharashtra was incorporated on September 16, 1935 and started their business on
February 8, 1936. In April 10, 1946, The Maharashtra Executor & Trustee Company
Pvt Ltd was incorporated as a wholly owned subsidiary of the Bank. In July 1969,
Bank of Maharashtra was nationalized along with 13 other banks. After
nationalization, the Bank expanded rapidly. In the year 1998, the Bank attainted the
autonomous status, which helped the Bank in providing more and more services with
simplified procedures without intervention of Government. In the year 2000, they
incorporated Magic eMoney Ltd (MeM) a joint venture of Bank of Maharashtra, Dena
Bank, NextStep Infotech P. Ltd. (NSIPL) and Magic Software Enterprises (MSE)
Israel continued to undertake departmental projects. During the year 2003-04, the
Bank came with their initial public offer of 10 crore shares of Rs 10/- each at a
premium of Rs 13/- amounting to Rs 230 crore. The issue received overwhelming
response and was over subscribed by more than 11 times. Also, they opened 34 new
branches and upgraded 10 extension counters into full fledged branches during the
year. During the year 2004-05, the Bank opened 14 new branches, 2 extension
counters and up-graded 1 extension counter into a full-fledged branch. Also, they
opened Holiday Home at Shirdi in addition to 5 existing Holiday Homes at different
places. The Bank acquired a stake of 9% in Global Trade Finance Pvt Ltd, a non
banking finance company promoted by the EXIM Bank. In January 2006, the Bank
16 | P a g e



signed a MoU with Life Insurance Corporation of India, for distribution of their
insurance products. Also, they launched a scheme of money transfer service for Non
Resident Indians and other foreign account customers, using the Western Union
Money Transfer Services provided by Western Union Financial Services Inc. For this
regard, the Bank has entered into agreement with Weizmann Forex Ltd, the primary
agent of Western Union Financial Services Inc. During the year 2006-07, the Bank
opened 29 new branches and upgraded 16 extension counters into full fledged
branches. They expanded the ATM Network from 145 ATMs to 302 ATMs during
the year and entered into collaboration with VISA for issuance of Debit cards. The
Bank commissioned their own Data Center at Pune and Disaster Recovery (DR) site
at Hyderabad. Also, they established six IT Labs at Delhi, Kolkata, Chennai,
Hyderabad, Bangalore and Lucknow in order to take care of the massive training
requirement for the CBS project. The Bank launched new schemes like Mahalaxmi
Term Deposit Scheme (3 years term deposit scheme), Mahadeep Scheme (Financing
of Solar Water Heating System), Insta Remit Scheme (RTGS scheme for instant fund
transfer), etc during the year. In May 2006, they entered into tie up with United
Insurance Company Ltd for distribution of their non-life insurance products. During
the year 2007-08, the Bank also launched two group insurance schemes, namely Maha
Suraksha Deposit Scheme for all types of deposit account holders and Maha Grih
Suraksha for home loan borrowers. Also, they entered into distribution agreement
with 15 select Asset Management Companies during the year. They opened 20 new
branches upgraded 10 extension counters into full fledged branches. They also opened
3 Currency Chests during the year. In March 2008, the two Regional Rural Banks,
namely Aurangabad Jalna Gramin Bank and Thane Gramin Bank were amalgamated
into one unit in the name of Maharashtra Godavari Gramin Bank with head office at
Aurangabad and having area of operation in nine districts of Maharashtra.As at March
31, 2008, the total branch network comprised of 1,375 branches and three extensions
counters spread over 22 states and two union territories.



17 | P a g e



Our Logo

The Deepmal
With its many lights rising to greater heights
The Pillar
Our institution- Symbolizing strength
The Diyas
Our Branches- Symbolizing service.

The 3 Ms Symbolizing
-Mobilization of Money
-Modernization of Methods and
-Motivation of staff

Our Aim
The bank wishes to cater to all types of needs of the entire family, in the whole
country. Its dream is;
"One Family, One Bank, Bank of Maharashtra


18 | P a g e



ORGANISATION CHART










Chief
Manager
Mrs. Rupam Chaukekar
Officer
Mr. T. N. Shirvayye
Special
Assistance
D.S. Sonawane
Cashier
J.P. Sakpal
Manoj Isawe
Peon
K.G . Pawar
19 | P a g e



BENEFITS GIVEN BY BANK

Followings are the services provide by Bank Of Maharashtra;

o Bank Deposits
o Lending Of Loan
o ATM Service
o Credit Cards
o Demat Services
o Bancs
o Bancassurance
o Distribution Of Mutual Fund
o Executors And Tustee Services
o Mahabill Pay
o Mahabank Insta Remit Scheme
o Capital Market Application(ASBA)
o NEFT
o MAHAeTRADE ( ON LINE Trading Facility)







20 | P a g e



THEORETICAL BACKGROUND

Loan :-
Loan is the amount borrowed from bank. The nature of borrowings that the
money is disbursed and recovery is made in installments while lending money by way
of loan, credit is given for a definite purpose and for a pre-determined period.
Depending upon the purpose and period of loan, each bank has its own procedure for
granting loan. However the bank is at liberty to grant the loan requested or refuse it
depending upon its own cash position and lending policy. There are two types of loan
available from banks:

(a) Demand loan, and

(b) Term loan

Demand Loan :-

Demand Loan is a loan which is repayable on demand by the bank. In other
words, it is repayable at short-notice. The entire amount of demand loan is disbursed
at one time and the borrower has to pay interest on it. The borrower can repay the loan
either in lump sum (one time) or as agreed with the bank. For example, if it is so
agreed the amount of loan may be repaid in suitable installments. Such loans are
normally granted by banks against security. The security may include materials or
goods in stock, shares of companies or any other asset. Demand loans are raised
normally for working capital purposes, like purchase of raw materials, making
payment of short-term liabilities.
Term Loans :-
21 | P a g e



Medium and long term loans are called term loans. Term loans are granted
for more than a year and repayment of such loans is spread over a longer period. The
repayment is generally made in suitable installments of a fixed amount.

Term loan is required for the purpose of starting a new business activity,
renovation, modernization, expansion/ extension of existing units, purchase of plant
and machinery, purchase of land for setting up of a factory, construction of factory
building or purchase of other immovable assets. These loans are generally secured
against the mortgage of land, plant and machinery, building and the like.

Long-term and Short-term Loans :-

Commercial banks grant loans for different periods-long, short and medium
term for different purposes.

(1)Short-term loans :-

Short term loans are granted by banks to meet the working capital needs of
business. The working capital needs refer to financial needs for such purposes as,
purchase of raw materials, payment of wages, electricity bill, taxes etc. Such loans are
granted by banks to its borrowers to be repaid within a short period of time not
exceeding 15 months. Short term loans are normally granted against the security of
tangible assets like goods in stock, shares, debentures, etc. The rate of interest charged
on short term loans ranges from 12% to 18% p.a.



22 | P a g e



(2) Long Term Loans :-

Medium and long term loans are generally known as term loans. These
loans are granted for more than 15 months. In case of medium term loan, the period
ranges from 15 months to less than 5 years. Medium term loans are generally granted
for heavy repairs, expansion of existing units, modernization/renovation etc. Such
loans are sanctioned against the security of immovable assets. The normal rate of
interest ranges between 12% to 18% depending upon the period, purpose, nature and
amount of the loan. Though banks may grant long term loans, they avoid granting
loan for more than 5 years.

(I)Filling up of loan application form :-

Each bank has separate loan application forms for different categories of
borrowers. When you want to borrow money from a bank, you will have to fill up a
loan application form available with the bank free of cost. The loan application form
contains different columns to be filled in by the applicant. It includes all information
required about the borrower, purpose of loan, nature of facility (cash-credit, overdraft
etc) required, period of repayment, nature of security offered, and the financial status
of the borrower.
(ii) Submission of form along with relevant documents

The loan application form duly filled in should be submitted to the bank
along with the relevant documents.

(iii) Sanctioning of loan

23 | P a g e




The bank scrutinizes the documents submitted and determines the credit
worthiness of the applicant. If it is found to be feasible, the loan is sanctioned. If the
loan is for Rs 5000 or less, normally the Branch Manager himself can take the
decision and sanction the loan. In case the amount of loan is more than Rs5000, the
application is considered at regional, zonal or head office level, depending on the
amount of loan.

(iv) Executing the Agreement

When the loan is sanctioned by the bank and the borrower is informed about it,
he will have to execute an agreement with the bank regarding terms and condition for
the amount of loan raised.

(v) Arrangement of Security for Loan

The borrower will now arrange for security against the loan. These securities
may be immovable properties, fixed deposit receipts, and other documents. National
Savings Certificate, as per agreement. When the borrower completes all the
formalities, he is allowed to get the amount of House, Education,& Vehicle as
sanctioned by the bank. In case of discounting of bills, the bank credits the amount
of bill to the customers account before the realization of the bill and thus, makes
available the fund. In case, the bills dishonored on due date, the amount due on the
bill together with interest and other charges are payable by the party whose bill is
discounted.


24 | P a g e



Bank of Maharashtra loan process :-

Loan is an important factor of every bank. People need loan for various
reason like Personal need like for their house or Vehicle, Students need loan for their
education. Bank provide loan to person after fulfill condition require for loan and
collect interest from debtor.
BOM has been providing various type of loan like vehicle loan, Home Loan
Education Loan, Personal loan, as well as any kind of security against loan BOM
charges reasonable interest again this loan. The financial assistance by way of loan
and advance can be extend only to a benefited member of the bank who is the either a
regular or nominal member of the bank.
Financial assistance given to the member borrower is for a stipulated period
in may be for a short term or a medium term, short term advance are repayable within
24 months, medium term loan/advance are repayable within 60 months and the long
term loan/advance other than housing finance are repayable within 7 and more year
advance sanction for housing are repayable within 15 year or as board of director may
think fit and proper from time to time.
Loan should be repaid by monthly or by quarterly installments or by half year
installments as per sanction given by board of director in each specific case. The
period of repayment should be decided by the board of directors Jr and senior officer
of the head office and branch manager taking into consideration the business, and
repaying capacity of the borrower
The Bank will work out the available disposable fund for lending a determine
the period of repayment. If the board of director deem in fit and proper in case of
standard assets regular loan bank may grant rebate in interest which will not exceed
1% PA in overdue case. The bank can charge interest at the rate not exceeding 2%
over and above the rate of interest applicable on that particular loan.
The bank has right to debit actual expenses on account of postage incident exp
and personal visit for verification etc. In case of default legal exp connected with
25 | P a g e



recovery including advocate fees incidental charges etc will amount recovered
from the borrower.

Bank make advance against following securities for Term Loan
The Bank makes advance against specific securities. The loan and
advance are classified on the basis of securities that are offered by the borrower
classification of loan as per securities is as under
1] Loan against bank fixed deposit receipts
2] Loan against mortgage of land and building
3] Loan for purchase of vehicles against hypothecation of vehicle
4] Housing loan against mortgage of said flat, building plot and constructed
thereon
5] Loan against the letter of undertaking given by the employer to deduct the
amount of installment from the salary/wages to sent complete salary/wages
to the bank till the total repayment of the loan.
6] Loan against any other securities approved by board of director
7] Education loan.

Term Loans are granted generally following purpose

Construction and repair of dwelling house.
Purchase of consumer durable goods/domestic goods.
For education expenses.
For commercial expenses/medical expenses.
26 | P a g e



HOUSING LOAN :-

Housing loans are provided by Bank of Maharashtra largely. Usually bank
provided this type of loan long thermally and against mortgage of said flat, building
plot and constructed thereon.
Bank of Maharashtra Bank Home Loan schemes are provided both to the
resident and non-resident Indians thereby helping them work towards realizing their
dream to own a home. The Bank of Maharashtra home loans are offered keeping in
mind the individual needs and requirements of people wishing to buy/construct a
house of their own. Loan applicants with a steady and consistent source of allowance
can apply for Indian Bank housing loans

Target Group:
The target group is the salaried class, professionals, Self-employed & business-
men. Banks fix the age criteria for availing the loan.
Purpose:
The purpose of housing loan is for the Construction or Purchase of House or
Flat or Apartment, repairs & renovation of house.
Eligibility:
Age: Minimum 21 Years
60 years in case of salaried persons having Pension.
60 years for Businessmen.
65 years for professionals i.e. Doctors/ Architects/CAs/ Engineers/Lawyers/CS/CWA,
etc.
*Age Maturity of Loan should not be more than 75 years.
Amount of Home Loan
27 | P a g e



The quantum of home loan offered by Bank of Maharashtra for salaried
class 60 times of gross or70 times of net monthly salary whichever is higher subject to
applicable margin. The applicant can also add the income of the spouse in order to get
a home loan of a larger amount. The total income left after EMI and other deductions
should not exceed 65% of gross monthly salary / annual income
Home Loan Disbursement
The bank offers lump sum home loan amount in case the loan applicant goes
for purchasing an already existing house or a flat.
Repayment Tenure:
The bank has prescribed a loan repayment period of 20 years(including
holidays) in case of buying or constructing a house or a flat on floating interest rate
method. The home loan repayment period prescribed by the bank on fixed interest rate
scheme lasts to 10 years.
Home loan Rates
The rate of interest offered On Bank of Maharashtra Home Loan are offered on
two types of interest rate schemes - Floating Interest Rate, Fixed Interest Rate. The
interest rate on home loan keeps on changing according to the movements of the
market. The current fixed interest rate on BOM Bank Housing loan for a loan amount
of up to Rs 25 lacs is charged at the rate of 10.25% for 5 years and Rs25 lakh up to 30
for above 5 to 10 year 10.25% and the same on a home loan amount of over Rs 30
lakh up to Rs 75 lakh is charged at the rate of 11% for 5 year to 10 year
Security:
The property purchased or constructed out of the bank loan is taken by way of
mortgage.



28 | P a g e



Guarantor:
In home loan, Guarantor is most important.


Bank has to fulfillment following document to housing loan
A] Sales deed
B] Builder NOC
C] Society NOC
D] Agreement bond/hypothecation deed
E] Demand promissory note
F] Letter of lien and set off
Particular document to be submitted to customer
A] Payment receipt or income tax return file
B] Guarantors payment receipt or income tax return file
C] Proof of residence, Pan card Xerox

* Xerox copies of Ration Card or Voters Identity Card or Passport or Electricity or
Telephone bill or any such document acceptable to the ban

Securitization Act:
Under the Securitization Act 2002, house is mortgage for the bank up to
repayment of loan. Suppose the customer cannot repay loan for the given/available
period the bank can sold this house & recover their dues.

29 | P a g e



Property Insurance:
Bank does the general insurance/property insurance of the tenure of loan & cost
of the property. The building financed has to have an insurance policy against the risk
of fire, earth quake, floods, etc. These days, banks are insisting on the insurance on
the life of the borrower so as to cover the loan amount by paying a onetime premium.

















30 | P a g e



EDUCATION LOAN :-

Bank of Maharashtra provides convenient educational loans for
meritorious/deserving students to acquire knowledge and skill in the field of their
interest. By playing beacon, new-generation's quest for success is ably supported,
paving way for Generation Banking

Eligibility :-
The applicant should be an Indian National.
He / She should have secured admission to professional / technical courses in India or
abroad through Entrance Test / Merit based selection process

Purpose :-
To meet the cost of education covering fee payable to college / school / hostel,
exam fees, purchase of books / equipment's, travel expenses / passage money for
studies abroad, purchase of computers essential for completion of the course etc.
Caution Deposit, Building fund/ refundable deposit supported by institution
bills/receipts, subject to a maximum of 10% of total tuition fees for the entire course.
Insurance premium for student borrower
Studies in India
Diploma/Graduation/Post-graduation courses in various disciplines.
Computer certificate courses of reputed institutes accredited to The Department of
Electronics

Studies Abroad
31 | P a g e



Job-oriented professional/technical courses offered by reputed universities
MCA, MBA, MS etc.
Maximum permissible amount of loan :-
For Studies in India - Rs.10.00 lakh
For Studies Abroad - Rs.20.00 lakh
Rate of interest :-
Up to Rs.4.00 lakh (base rate + 2.00 % )
Above Rs.4.00 lakh_ (base rate + 2.75 %)
Securities :-
Above Rs. 4.00 lakh to Rs. 7.50 lakh_ satisfactory third party guarantee
Above Rs. 7.50 lakh _ Value of collateral security after providing requisite margine as
below should be equal to the quantum of finance plus 2 acceptable guarantors.

Computers purchased out of loan hypothecated.
Margin :- up to Rs. 4.00 lakh Nil
Above Rs .4.00 lakh_
5 % for studies in India
15% for studies abroad







32 | P a g e



Particular document to be submitted for education loan :-
Si
no
Particular Studies in India Studies in abroad
1 Proof of residence Xerox copies of Ration Card or Voters Identity Card or
Passport or Electricity or Telephone bill or any such
document acceptable to the bank
Same as in Col.3
2 Academic record Copy of the Xth std/XIIth std mark list, for under
graduates. Degree mark list/provisional certificate for
post graduates
Same as in Col.3
3 a. Date of birth/age
b. Community (for statistical
purpose only)
SSLC/TC/Mark list
Community Certificate
Same as in Col.3
besides Passport
4 Family Income Salary certificate/Pension certificate/Auditor's certificate
in case of business category/IT return filed/any other
proof for the income stated
Same as in Col.3
5 Admission
Admission letter/ Bonafied student certificate from the
College/University
Certificate/I 20
from the
College/Universit
y
6 Fee structure Letter/Certificate from the College/University Certificate/I 20
from the
College/Universit
y
7 Passport/VISA
Not applicable
Copies to be
enclosed
8 Guarantee/Co-obligation Parent's/Guardian's Co-obligation to be furnished Same as in Col.3
9 Collateral, wherever required LIC policy (surrender value of which should be not less
than the loan amount at the time of availing the loan)
/Share certificates/Units of UTI etc. Valuation certificate
from Bank's approved panel values and legal opinion
from Bank's panel advocate in case of land/buildings.
Same as in Col.3
10 Margin (Above Rs.4.00 lakh)
For studies in India: 5%
For studies abroad: 15%
Details regarding source of funds for meeting the margin
furnished along with documentary evidence
Same as in Col.3
11 Declaration/affidavit stating
that no Educational Loan is
availed from any other bank
by the applicant and his
parent
To be submitted To be submitted
12 Documents to be enclosed A & L of the student/parent/guardian/guarantor
Details of securities in Col.9
Same as in Col.3




33 | P a g e



VEHICLE LOAN :-

Personal vehicle Loan :-

Bank also provide loan to customer for purchase personal o vehicle. Turn
your dream into reality own that new car always desired, with a little help from us we
offer car loan up to 80% of ex-showroom of the car our interest rate pleasantly
surprise you can take up to 5 year to repay the loan.

Target Group :-
Salaried Class, pensioners, professionals, self-employed business persons &
other individuals who have regular income
Loan on the strength of your income:
Submit income proof as required and avail finance up to 80% of the ex-
showroom price car loan with fixed interest rate Bank of Maharashtra offer new car
loan with fixed interest opportunity

Interest Rate for vehicle loan is as following :
New two/ four wheeler personal use 10.50%
New two/ four wheeler personal use up to Rs 5 lakh 10.50%
Up to Rs 2 lakh ( old vehicle) 10.5



34 | P a g e



Commercial vehicle loan :-
Every business person need commercial vehicle for their business they cannot
raise such finance quickly, BOM provided Commercial vehicle loan large scale. BOM
has extended products like founding of new vehicle, finance of used vehicle, top up
on existing loan.

For new commercial vehicles
Utmost flexibility of selecting a finance scheme that suits our need Speedy
delivery of vehicle after the initial payment and the submission of all necessary
documents maximum finance provided 80% of chassis cost.

Loan Amount :-

80% of Invoice Value + Registration Charges + Insurance

For old vehicle
Quick against vehicle that are up to 5 year old. Maximum tenure of up to 60
manths maximum finance provided is 50% of the value as assessed by BOM.
Interest Rate for vehicle loan is as following
New vehicle (commercial use) 10.50%
Above Rs 2 lakh (old vehicle) 13%

Loan Amount For old vehicle
50% of Agreement value or valuation whichever is less

35 | P a g e



Bank has to fulfillment following document Vehicle loan :
A] Agreement bond
B] Demand promissory note
C] Letter of continuity (whenever necessary)
D] Delivery letter
E] road tax &insurance receipt
F] letter of authority from the borrower addressed to the concerned RTO
countersigned by the borrower for transfer of vehicle favor of the bank
G] letter of hypothecation creating a charge in respect of hire vehicle
H] Registration certificate (i.e. R C book)
I] comprehensive insurance policy in respect of vehicle duly assess in favor of
bank
J] Valuation report of vehicle in case of old vehicle
K] Bank transfer (RTO) duly signed by the borrower

Security :-
Vehicle & Salary/Income


Repayment :-
Maximum 5 years

36 | P a g e



Balance Sheet of BOM
(Rs. in Crores)

Particulars Mar-13
SOURCES OF FUNDS :
Capital 1,249.48
Reserves Total 5,147.46
Deposits 94,336.93
Borrowings 12,877.49
Other Liabilities & Provisions 3,442.15
TOTAL LIABILITIES 117,053.51
APPLICATION OF FUNDS :
Cash & Balances with RBI 5,265.29
Balances with Banks & money at Call 907.56
Investments 31,430.31
Advances 75,470.78
Fixed Assets 1,429.48
Other Assets 2,550.09
Miscellaneous Expenditure not written off 0.00
TOTAL ASSETS 117,053.51
Contingent Liability 24,361.76
Bills for collection 2,549.00


37 | P a g e



DATA ANALYSIS AND INTERPRETATION

1] Do you know about loans & advances.





Interpretation :-
50% of the respondent said that they keep the loans & advances.





%
Yes
No
Yes 50 %
No 20 %
38 | P a g e




2] Have you ever opted from any loan & advances from Bank of Maharashtra?
Yes 40 %
No 30 %












%
Yes
No
39 | P a g e





3] If yes , which bank loan or advance have you taken ?
Banks %
SBI 20
Bank of Punjab 8
Oriental Bank 10
BOM 16
UTI 7
HDFC 5
ICICI 4




Interpretation :-
Maximum banks products followed by INB & then BOM. So the
market leader is SBI.

0
2
4
6
8
10
12
14
16
18
20
SBI Bank of
Punjab
Oriental
Bank
BOM UTI HDFC ICICI
%
%
40 | P a g e






4] How did you come to know about Loans & advances ?
Advertisement 40 %
Word of mouth 10 %
Referred by your company
/ friend
10 %



Interpretation :-
Most of the respondent said that they know about loans though
advertisement.



%
Advertisement
Word of mouth
Referred by your company /
friend
41 | P a g e




5] What motivates you for selection any bank?
a) Service 30 %
b) Brand Name 10 %
c) Procedure 8 %
d) Facilities 5 %
e) Possible 10 %
f) Advertisement 9 %



Interpretation :-
People keep the product due to sales man efficiency with 30 %,
Followed by customers demand with 25 % , followed by profit margin with 15%.




%
0%
10%
20%
30%
%
%
42 | P a g e





6 ] Which company would you prefer if you have never applied for bank loans &
advances ?
SBI 30 %
Bank of Punjab 7 %
Oriental Bank 8 %
Bank of Maharashtra 19 %
UTI 1 %
ICICI Bank 2%
HDFC 3%



Interpretation :-
50 % of people are satisfied with the bank loan & advances and 20 %
are not satisfied with the banks.


%
0%
10%
20%
30%
%
%
43 | P a g e




Bank of Maharashtra Deposits and Loan since 2 years

For the Yearend 31st March (Rs in crore)
On the basis of questionnaire a detailed data collection was done and
analyzed. All analysis detail are provided in annexure in the letter part of report









0
5
10
15
20
25
30
35
40
2011-12 2012-13
Deposits
Loan
Sr. no. Year ended Deposits
Growth %
Loan
Growth %
1 2011-2012 16.51 25.86
2 2012-2013 19.28 38.09
44 | P a g e



Bank of Maharashtra Progress Report for Last 5 Year

Year ended 31st march (Rs in crore)

Sr. no Year Profit
1 2008-2009 375.17
2 2009-2010 439.58
3 2010-2011 330.39
4 2011-2012 430.83
5 2012-2013 759.52








0
100
200
300
400
500
600
700
800
2008-09 2009-10 2010-11 2011-12 2012-13
PROFIT
PROFIT
45 | P a g e



MAJOR FINDINGS OF THE STUDY

Based on the quantitative analysis the major findings of the study have been
highlighted below.
Most of the people are satisfied with the extent of their Loans & Advances
cover. They are not interested in opting for more Loans & Advances.

People do not consider Loans & Advances as a good savings because of high
interest rate.

As Loans & Advances is a long term contract. Maximum people do not have
faith on private Loans & Advances companies, they still prefer Bank of
Maharashtra Loans & Advances & public limited companies.

Because of less advertising not many people are aware about private Loans
&Advances companies.

Most of the people do not know about broker, corporate agents and bank
assurance, they rely on their agents only

The most preferred type of plan is money back. The reason being availability
of funds after every five years which can be used for paying further premium,
thus saving the regular income.

Some people have no idea about what type of cover they have.

Most of the people feel that Loans is essential but they think returns are low.

Some people have their doubts on the credibility and long stay of private tools
of loan companies.

46 | P a g e





Advertising of the Loans & Advances product should stress on the need
of security.

Loans & Advances should be popularized as the means of securing future
rather than saving tax.

New entrants should come out with innovative riders.

Possible should be issued quickly and with less formalities

Other service should also be improved.
Newspaper/Magazines and television are the most effective medium of
advertising Loans & Advances.












47 | P a g e



RECOMMENDATION

1] From our research I could find out that people are not aware about the possible and
features of tools of loan. Therefore Bank of Maharashtra Tools of loan and ICICI are
recommended to shed light on possible and explain the benefits, thus increasing the
awareness.
2] The penetration of tools of loan in India is around 22%. This indicates that a vast
majority of rural population is not covered. The market player needs to explore this
untapped potential through their marketing and sales network.
3] Loan should be given from bank @ 60% or more of total deposit
4] Interest to be given on deposit should be more therefore customer will attract to
bank result in increase deposit
5] Interest to be charge on loan should not be more therefore customer will attract to
bank result in increase in profit











48 | P a g e



CONCLUSION

Risk taking is a necessary condition for wealth creation. Risk arises as a
deviation between what happens and what was expected to happen. Banks are no
exception to this phenomenon. As a result managements have to create efficient
systems to identify measure and control risk and ALM is just one component of the
overall cluster.

1] Bank deposit- loan ratio is very well in 2008-2009 the deposit of bank was Rs
22,87.30 crore i.e.75.47% & loan was Rs 732.47 i.e. 24.26 %
Bank deposit- loan ratio is very well in 2009-2010 the deposit of bank was Rs
48,28.69 crore i.e. 71.95% & loan was Rs 1882.19 i.e. 28.05 %
Bank deposit- loan ratio is very well in 2010-2011 the deposit of bank was Rs
31,31.18 crore i.e. 47.09% & loan was Rs 3518.64 i.e. 52.91 %
Bank deposit- loan ratio is very well in 2011-2012 the deposit of bank was Rs
43,96.38 crore i.e. 44.29 % & loan was Rs 55,29.05 i.e. 55.71 %
Bank deposit- loan ratio is very well in 2012-2013 the deposit of bank was Rs
56,76.06 crore i.e. 42.32 % & loan was Rs 77,35.87 i.e. 57.68 %
2] Bank charge reasonable interest on loan & giving appropriate interest on customer
deposit & bank give maximum duration to repayment of loan as well as provide loan
quickly


3] There has been tremendous change in the tools of loan history. And with it
there has been continues growth in this sector both in Indian as well as world context.

49 | P a g e



4] New players like Bank of Maharashtra are leading the sector due to
their strategic management and tailored made projects.

5] From research also I conclude that we do not invest in tools of loan
for returns; rather we invest in it for regrettable necessities.


















50 | P a g e



BIBLOGRAPHY

Books
Banking Aspects
Principle of bank -Mc Million
Website
www.google.com
www.BankofMaharashtra.co.in
Report refer
HDFC Bank
ICICI Bank